Policy Solutions for the Disability Insurance Program

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Roughly 11 million people receive compensation under the Social Security Disability Insurance Program (DI). The vast majority of these beneficiaries are disabled workers themselves, and a smaller share is spouses and children of disabled workers. While 11 million people rely on this program, it is facing an impending financial crisis: the DI program is currently in cash-flow deficit, and the federal government had to borrow $37 billion to finance program expenditures in FY2013. Experts expect the DI trust fund, which finances benefit payments, to be depleted by 2016, leading to a 20 percent cut in benefits on recipients. There are a number of policy changes – from accounting changes to revenue increases to spending cuts – that can help alleviate these concerns. This paper examines several potential avenues of reform.